Assembly Quote

How do you cost the products you sell? We do contract work as well as building our own products but both work streams go through the same costing procedures.

How you structure your costs really depends on your business. For instance, you can include power usage in your overheads and include it in your hourly rate, or you might want to apportion some of the costs of that power with the divisions that are using it. Equally some establishments might have a picking team that loads parts onto feeders so the cost of picking/prep is part of your overhead, others might load online making that a clear part of the production cost, partcularly if it incurs downtime.

For subcontract work you are going to incur costs based both on the volume of parts and hence time taken to assemble and the number of BOM lines which affect how long it takes to pick prep load etc. For small jobs assembly time may well be the least significant cost incurred. Your line operators/managers should be able to give you real placement rates based on component mix. The higher the volume the more accurate your time estimate will need to be and the more competitve your competition.

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